System and method for trading financial instruments using multiple accounts

ABSTRACT

A system and method for trading financial instruments from a master account having a plurality of sub-accounts. A user defines an account group, which includes a plurality of sub-accounts, and the user selects an allocation model for the account group from a group of allocation models. After executing an order of financial instruments for the account group, the order is allocated to the sub-accounts using the allocation model. Prior to executing the order, a financial capability of the account group to execute the order using a primary allocation model is evaluated, and a secondary allocation model is used if the order cannot be allocated using the primary allocation model. The financial capability of the account group may be evaluated in real-time, and a partially executed order may also be allocated to the sub-accounts in real-time. Upon the execution of the order being completed, the order is reallocated to the sub-accounts using the selected allocation model.

FIELD OF THE INVENTION

The invention relates generally to a financial system and method formanaging portfolios and, more specifically, a system and method ofallocating an order made in a master account to sub-accounts associatedwith the master account.

BACKGROUND OF THE INVENTION

Many managers (i.e., money managers or fund managers) of financialassets promote or advertise their services and/or funds in conjunctionwith a particular market sector or investing/trading style. For example,a fund manager may concentrate in one or more fields, such as emergingmarkets, small-cap technical funds, junk bonds, commodity options, etc.When a client provides capital to such a fund manager, the client has anexpectation that any trades executed within the fund by the fund managerwill be shared equally by all the clients in the fund, no matter howlarge or small the client.

Conventionally, when a fund manager executes an order for a fund, thefund manager determines the size of the order (for example, a buy orderfor 1000 shares of stock A) and pre-allocates the order to the clientsassociated with the fund (for example, 100 shares to client X, 300shares to client Y, and 600 shares to client Z). As the order isexecuted, the shares are then distributed to the clients within thefund. An issue arises, however, when the order can only be partiallyexecuted (for example, only 600 shares of stock A are available at thedesired price). In such a situation, partial orders are firstdistributed to the largest client within the fund and then to smallerclients within the fund. In the example, client Z would receive 600shares of stock A.

A problem occurs if the partial order can no longer be executed (forexample, the price of stock A has risen higher than the desired askingprice) or the remaining portion of the order is filled at a differentprice than the price for the other partial orders. In the firstinstance, client Z receives 600 shares of stock A, whereas clients X andY do not receive any shares. In the second instance, either client Z orclients X and Y receives shares at a higher/lower price than the other.In both instances, the desired goal of having all the clients within thefund share equally on the trades made by the fund manager is notaccomplished since each client receives unequal portions of the trade.There is, therefore, a need to provide the capability to a fund managerto equitably allocate the results from trades made for a fund/accountthat includes multiple clients.

SUMMARY OF THE INVENTION

This and other needs are met by the present invention. According to oneaspect, the present invention includes a system and method for tradingfinancial instruments from a master account having a plurality ofsub-accounts. A user defines an account group, which includes aplurality of sub-accounts, and the user then selects an allocation modelfor the account group from a group of allocation models. After fully orpartially executing an order of financial instruments for the accountgroup, the order is allocated to the sub-accounts using the allocationmodel. Prior to executing the order, a financial capability of theaccount group to execute the order using a primary allocation model isevaluated, and a secondary allocation model is used or the order ismodified if the order cannot be allocated using the primary allocationmodel. The financial capability of the account group may be evaluated inreal-time, and a partially executed order may also be allocated to thesub-accounts in real-time. Upon the execution of the order beingcompleted, the order is reallocated to the sub-accounts using theselected allocation model.

In a further aspect of the invention, the allocation model is selectedfrom the group consisting of: equal quantity weighted, net liquidationweighted, available equity weighted, percentage of order, ratio oforder, and percentage of existing position.

Additional advantages of the present invention will become readilyapparent to those skilled in the art from the following detaileddescription, wherein only an exemplary embodiment of the presentinvention is shown and described, simply by way of illustration of thebest mode contemplated for carrying out the present invention. As willbe realized, the present invention is capable of other and differentembodiments, and its several details are capable of modifications invarious obvious respects, all without departing from the invention.Accordingly, the drawings and description are to be regarded asillustrative in nature, and not as restrictive.

BRIEF DESCRIPTION OF THE DRAWINGS

Reference is made to the attached drawings, wherein elements having thesame reference numeral designations represent like elements throughout,and wherein:

FIG. 1 is a schematic flow diagram showing the process steps of how anorder is allocated to sub-accounts within an account group; and

FIG. 2 is a schematic diagram illustrating the system showingconnections between a server, a client terminal, and trading entities.

DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS

In accordance with one aspect of the invention, a method for tradingfinancial instruments from a master account having a plurality ofsub-accounts is illustrated in FIG. 1. In step 10, a user (e.g.,financial advisor, money manager, etc.), defines an account group thatincludes a plurality of sub-accounts. In step 20, the user selects anallocation model for the account group from a group of allocationmodels. The user then places the order in step 30, and if the order ispartially executed, step 40, the order is allocated to the sub-accountsin step 50 using the allocation model in step 60. Upon the order beingfinalized, step 40, the order is allocated or re-allocated to thesub-accounts in step 60 using the allocation model.

The system for trading financial instruments is illustrated in FIG. 2,the user is connected to a server 110 via a client terminal 120, and theinvention is not limited in the particular manner in which the clientterminal 120 is connected to the server 110. For example, the clientterminal 120 may connect to the server 110 via the internet.Alternatively, a direct connection, such as a dial-up connection, may bemade between the server 110 and the client terminal 120. As used herein,the term client terminal 120 may mean a single computer or computerprogram. Either the client terminal 120, the server 110, or both mayexecute one or more computer programs that execute the method describedherein. The server 110 is also connected to trading entities 140 orintermediaries 140 for trading entities, such as NYSE, NASDAQ, Eurex,ISE and Instinet. It should be noted, however, that the invention is notlimited as to a particular trading entity 140 or intermediary 140 fortrading to which the server 110 connects.

An illustrative but not exclusive list of financial products/instrumentscapable of being traded with the present system and method includestocks, stock options, stock index options, single stock futures,exchange-traded funds, mutual funds, bonds, currencies, commodityfutures, financial futures, index futures, single stock futures, optionson futures, and any financial products subject tofutures/derivatives/securities regulation.

In step 10, the system enables a particular user of a master account tocreate one or more account groups. Each account group includes aplurality of individual accounts, hereinafter referred to assub-accounts, within the master account, and at least one allocationmodel is associated with the account group. To create an account group,the user creates a desired group name in the system. Upon determinationthat the desired group name is unique to the master account, the newgroup name is recorded in a database. Once a name has been created forthe account group, the user can later delete the account group, edit thegroup name, add/remove accounts within the account group, and otherwisemodify any settings associated with this particular account group. Aparticular sub-account may be associated with more than one accountgroup.

After creation of the new account group, in step 20, the user selects aparticular allocation model that will be associated with the accountgroup. The allocation model is an integrated rule set that is applied toany financial transactions/orders associated with the account group. Theallocation model can include any number of rule sets associated with anynumber of conditions. For example, one rule set may be selected foropening trades and another rule set may be selected for closing trades.Additionally, a secondary rule set may be selected in case the primaryrules are not possible, for example, due to limitations in the financialcapability of one or more sub-accounts in the account group to completea particular order.

In a current aspect of the system, the system presents the user with alist of account groups associated with the user and a list of availableallocation rule sets. Upon selecting a particular account group, theuser can associate a particular allocation model (i.e., rule set) withthe account group. Furthermore, the user may select the time durationfor when the allocation rule set is to be used with the account group.Illustrative examples include selecting a default allocation rule set,selecting the allocation rule set only for the session, or selecting theallocation rule set only for the next order.

If the allocation rule set is selected as a default, the allocation ruleset is associated with the account group over multiple sessions unlesschanged or overruled. By selecting the rule set only for the session,the selected rule set overrides any default rule set for the length ofthe session. Likewise, by selecting the rule set only for the nextorder, the selected rule set overrides any default rule set or rule setfor the session-only for the next order. With this particular logic, therule is that the shorter duration association prevails (e.g., next orderonly prevails over session-only, and session-only prevails overdefault).

In addition to a primary allocation rule set, the user may select asecondary or backup rule set to be associated with a particular accountgroup. Similar to the primary allocation rule set, a user may select thesecondary/backup rule only for certain times periods (e.g., default,only for session, next order).

Although, the system may provide the user with predefined rule sets, thesystem may also provide the user with the ability to create a rule setthat was not previously defined. The following are examples of rule setsthat can be associated with an account group. These examples should beconsidered as illustrative and not limiting as to the type of allocationrule sets that can be used with the system.

Example “Equal Quantity Weighted”

In this rule set, shares are distributed equally between allsub-accounts in the account group. For example, if the user transmits anorder for 400 shares of stock ABC and the account group includes foursub-accounts, each sub-account receives 100 shares. An example of asecondary rule set that is associated with this primary rule set isillustrated in the following example. If the account group includes sixsub-accounts, each account receives 66 shares of stock ABC, and 1 shareis allocated to each account until all shares are distributed.

Example “Net Liquidation Weighted”

Shares are distributed based upon the net liquidation value of eachsub-account. The system is not limited as to the particular time atwhich the net liquidation value (i.e., total account value) of eachsub-account is determined. For example, the net liquidation value may bebased on the net liquidation value of each sub-account at the close ofthe previous business day. However, in a current aspect of the system,the net liquidation value of each sub-account is determined in real-timeat the time of the order. For example, at the time of an order, theaccount group includes three sub-accounts, A, B, and C, with netliquidation amounts of $25,000, $50,000, and $100,000, respectively.Upon an order transmittal of 700 shares of stock XYZ, the systemcalculates a ratio of 1:2:4 based upon the net liquidation values of thethree sub-accounts and allocates 100 shares to sub-account A, 200 sharesto sub-account B, and 400 shares to sub-account C.

Example “Available Equity Weighted”

This rule set is similar to “Net Liquidation Weighted” except thatinstead of calculating the allocation ratio based upon net liquidationof the sub-account, the allocation ratio is based upon the availableliquidity (equity) within each sub-account. The available liquidity usedin the calculation may be based upon the available liquidity of eachsub-account at the close of the previous business day; however, in acurrent aspect of the system, the available liquidity of eachsub-account is determined in real-time at the time of the order. Forexample, at the time of an order, the account group includes threesub-accounts, A, B, and C, with available liquidity amounts of $50,000,$100,000, and $200,000, respectively. Upon an order transmittal of 700shares of stock XYZ, the system calculates a ratio of 1:2:4 based uponthe available liquidity of the three sub-accounts and allocates 100shares to sub-account A, 200 shares to sub-account B, and 400 shares tosub-account C.

Example “Percentage of Order”

A percentage is manually pre-assigned to each sub-account. Beforeallowing the user to save the assigned percentages, if a total of thepercentages assigned to each sub-account does not equal 100%, the systemmay prompt the user to readjust the percentages until the percentagesadd up to 100%. Alternatively, or in addition, the system mayrecalculate the percentages for each sub-account based upon thecurrently assigned percentages so that the total percentage equals 100%.For example, if four sub-accounts, A-D, were each initially assigned 25%and a fifth sub-account, E, was added and assigned a percentage of 25%,the system may recalculate the percentages based upon 125%, such thateach sub-account would now be assigned a percentage of 20% (i.e.,25/125).

Example “Ratio of Order”

This rule set is similar to “Percentage of Order” except that instead ofcalculating the allocation ratio based upon set percentages for eachsub-account, the allocation ratio is based upon true ratios.Furthermore, unlike the “Percentage of Order” rule set, which requiresthat the total percentages allocated to each sub-account eventuallyequal 100%, when the ratio rule set is used, the system automaticallycalculates the percentages based upon the ratios. For example, assumingfour sub-accounts set with a ratio of 4:2:1:1, an order for 1000 shareswould be allocated to the four sub-accounts as follows: 500, 250, 125,and 125.

Example “Fixed Number”

At the time of an order, the user defines the number of shares eachsub-account in the account will receive. The total order size isdetermined by multiplying the number of shares per sub-account by thenumber of sub-accounts in the account group. For example, if the accountgroup has 12 sub-accounts, and the user selects 500 shares of XYZ stock,then the total order size will be 6000 shares of XYZ stock. Uponexecution of the transaction, each sub-account with receive 500 sharesof XYZ stock.

Example “Percentage of Existing Position”

This rule set is used to increase an already existing position. Apositive percentage may be used to increase a position, and a negativepercentage may be used to decrease a position. As an example, three ofthe six sub-accounts in account group hold long positions in stock XYZwith client A having 100 shares, client B having 400 shares, and clientC having 200 shares. To increase these holdings by 50%, “50” would beentered into a percentage field in the system. The system thencalculates the order size, which in this case would equal 350 shares,and the system allocates 50 shares to Client A, 200 shares to Client B,and 100 shares to Client C. Tables 1 and 2 illustrate one example of howthe system can be programmed to handle percentages with different typesor orders and positions.

TABLE 1 BUY ORDER Positive Percent Negative Percent Long PositionIncreases position No effect Short Position No effect Decreases position

TABLE 2 SELL ORDER Positive Percent Negative Percent Long Position Noeffect Decreases position Short Position Increases position No effect

The “Percentage of Existing Position” rule set may also includespecialized rules for opening and closing order. An opening ordercreates a new position, and a closing trade closes an existing position.Using the same example discussed above, to close out all the longpositions for the three out of the five sub-accounts in the accountgroup, a closing order can be created by entering in “−100” in thepercentage field. The system then calculates 100% of each position forevery sub-account in the account group that holds a position in theparticular financial instruments, and sells all shares to close thepositions. Thus, only sub-accounts with a existing position in thefinancial instruments are considered.

For opening orders, the user may have the option of selecting between apercentage increase for existing holders or a percentage increase forthe account group. The first example is an illustration of how thesystem treats a trade based upon a percentage increase for existingholders. By selecting a percentage increase for the account group, thosesub-accounts that do not have already a position will gain a position.Although the percentage increase will be based only on positions forsub-accounts that have positions, the shares resulting from the orderwill be based upon the default rule set for the account group unlessotherwise changed by the user.

Prior to submitting an order, in step 25 the system may analyze thefinancial capability of the account group and each sub-account in theaccount group using, for example, a real-time credit manager. The creditmanager evaluates, in real-time, the margin requirements of thesub-accounts to determine the financial capability of the particularsub-account. A further description of margin requirements and areal-time credit manager is found in U.S. patent application Ser. No.10/465,827, entitled “System for Managing Multiple Types of AccountsHaving Different Regulatory Requirements,” which is incorporated hereinin its entirety by reference.

Depending upon the rule set to be used from a particular transaction andthe particulars of each sub-account in the group account, thetransaction may not be able to be completed in the manner (i.e., usingthe allocation rule set) chosen by the user. To determine whether or notan order can be placed, the system may provide the user the real-timefinancial capability of the account group as a whole and/or of theindividual sub-accounts. If the order cannot be executed using theselected allocation rule set, in step 27, the system may provide one ormore options to the user.

One option would be for the system to reject/cancel the order. A secondoption would be for the system to reduce the order until all thesub-accounts in the account group can accept the proposed transactionsand either automatically submit the order or prompt the user forapproval prior to submitting the order. The reduction of the orderamount can be preset (i.e., by 20%) by the system or the system mayprompt the user to enter a particular percentage by which the order willbe reduced. Another option would be allow the user to override thesystem and allow the order as long as the total order can be allocatedsomewhere in the group. Furthermore, the user may recognize that pendingtrades associated with the account group or particular sub-accounts inthe account group may affect financial capability of the account groupto complete a particular order.

Still another option would be to have the system use a secondary orbackup allocation rule set that has been selected by the user, and theuse of the backup allocation rule set may be done automatically or mayrequire pre-approval by the user. Although the user may select thesecondary/backup allocation rule set, a default allocation rule set mayalternatively be preprogrammed into the system. This default allocationrule set may also be used as a rule set of last resort on an occasionwhen the primary and secondary/back rule sets cannot be satisfied. In acurrent aspect of the system, a default allocation rule set is the“Available Equity Weighted” rule set.

The selection of a secondary/backup allocation rule set and the defaultallocation rule set can be accomplished at many different levels. Forexample, a user may select the same backup and default allocation rulesets for all the account groups handled by the user. Alternatively,backup and default allocation rule sets may be selected for eachindividual account. Still further, backup and default allocation rulesets may be selected for a single transaction (or type of transaction).In yet another example, a user may select particular backup and defaultallocation rule sets to be associated with a particular primary ruleset. As evident from these illustrative examples, many different optionsexist for selecting secondary/backup and default allocation rule sets.

The system may also set a minimum allocation size. This minimumallocation size may be user settable or preset and may vary dependingupon the type of financial instrument in the order. For example, 100 maybe a minimum allocation size for stocks and 1 may be a minimumallocation size for futures. If used, the system allocates the order tothe sub-accounts based upon a multiple of the minimum allocation size.The actual allocated size may be either rounded up or rounded down fromthe calculated allocation size. If, for example, the user intended toensure that the smallest sub-accounts receive a distribution, the usermay select that the actual allocated size be rounded down from thecalculated allocation size. Any remaining portion of the order after theinitial allocation to all the sub-accounts may be allocated in anymanner. For example, the allocation of the remaining order may beginwith the largest accounts while rounding up.

The system may also periodically analyze the orders after being made butprior to execution of the order to determine if the order is stillviable. For example, after a particular order (Order A) has been madebut is still pending, prior pending orders have executed which havechanged the capability of sub-accounts in the account group to handleOrder A. In this situation, the system may prompt the user with the sameoptions discussed above. Also, with instances where multiple pendingorders cannot be executed, the system may selectively chose the lastorders placed for modification/cancellation prior to handlingearlier-placed orders.

As shown in step 40, an order may not be executed all at one time. Forexample, an order to purchase 100,000 shares of a particular stock maybe broken up into several partial orders. The system is not limited inthe manner in which a partial order is allocated upon execution. Forexample, partially executed orders may be buffered in the master accountuntil the order is ready for complete allocation. An issue arising fromthis methodology is that conflicts may occur if there are multiple openorders existing with different account groups in the master account. Insuch a situation, the financial capability of the individual accountgroups may not be calculated properly, which could lead to credit riskerrors.

In a current aspect of the system in step 50, each partially executedorder is allocated in real-time to the sub-accounts using, for example,the selected allocation rule set. The system may also allow partialpositions (i.e., fractions of a position), such as 0.27 futures, to beallocated to a sub-account. By allocating a partially executed order tothe sub-accounts, a subsequent analysis of the financial capability ofeach sub-account or account group will better reflect the true financialcapability of each account. An alternative to allocating partiallyexecuted orders in real-time is to select a time or value after whichhas been reached, partially executed orders are allocated. For example,a partially executed order may be buffered until 120 seconds after aprior allocation or after the buffered amounts exceeds $5,000.

After an order has been finalized (i.e., considered “not live”) in step60, such as when the complete order has been filled or for other reasons(e.g., the order has been cancelled or the end of the trading day hasbeen reached), the distribution of the order to the sub-accounts may berebalanced if, during partial execution of the order, the order waspartially distributed to the sub-accounts. An order that spans multipledays may be treated as separate orders for allocation purposes. Arebalancing of the order may be desirable, since the final distributionof the order, after partial distributions of the order to thesub-accounts, may introduce inequities in the distribution, which maynot comport to a distribution of the order if the allocation rule setwas applied to just a single distribution of the order. The system isnot limited as to the time in which the order is redistributed. Forexample, the order may be redistributed at the close of trading.However, in a current aspect, the order is redistributed as soon as theorder has been finalized.

The system is also not limited as to the manner in which the finalizedorder is redistributed. For example, in one aspect, all trades(including commissions/fees) associated with the order are reversed outof the sub-accounts and credited to the user master account. At thistime, commissions/fees associated with the order can be assessed at themaster account level, which adjusts the price of the order. By chargingcommissions/fees to the order at the master account level, issuesinvolving minimum commissions at the sub-account level can be avoided.Once an adjusted price of the order has been established, the order isallocated back to the sub-accounts based upon the selected allocationrule set. In this manner, each sub-account receives the same price.

The statement for each of the sub-accounts may include entries for eachof these transactions (i.e., the partial allocations, followed by thereversing of the allocation, and then the reallocation). However, in acurrent aspect of the system, the statement only includes a singleexecution and a single commission per order per date.

The present invention may be practiced by employing conventionalmethodology and equipment. Accordingly, the details of such equipmentand methodology are not set forth herein in detail. In the previousdescriptions, numerous specific details are set forth, such as specificinstructions, rules, processes, etc., in order to provide a thoroughunderstanding of the present invention. However, it should be recognizedthat the present invention may be practiced without resorting to thedetails specifically set forth. In other instances, well knownstructures for performing server and client terminal functions have notbeen described in detail, in order not to unnecessarily obscure thepresent invention.

Only an exemplary aspect of the present invention and but a few examplesof its versatility are shown and described in the present disclosure. Itis to be understood that the present invention is capable of use invarious other combinations and environments and is capable of changes ormodifications within the scope of the inventive concept as expressedherein.

1. A system for trading financial instruments from a master accounthaving a plurality of sub-accounts, comprising: a computer serverconnectable to a client terminal, the computer server being configuredto: define an account group, the account group including a plurality ofthe sub-accounts, select a primary allocation model for the accountgroup from a plurality of allocation models, select at least onesecondary allocation model for the account group from the plurality ofallocation models, prior to executing an order, evaluate the financialcapability of the account group to execute the order, when theevaluation shows that the primary allocation model may be used, executethe order of financial instruments for the account group, and allocatethe order to the sub-accounts using the primary allocation model afterthe order has been executed, when the evaluation shows that the primaryallocation model may not be used, but the secondary allocation model maybe used, execute the order of financial instruments for the accountgroup, and allocate the order to the sub-accounts using the secondaryallocation model after the order has been executed, and when theevaluation shows the first and secondary allocation models may not beused, execute the order of financial instruments for the account group,and allocate the order to the sub-accounts in accordance with the user'sinstruction after the order has been executed, wherein the allocationmodel defines an amount of the order to be allocated to eachsub-account.
 2. The system for trading financial instruments accordingto claim 1, wherein the individual financial capability of eachsub-account in the account group is evaluated using the selectedallocation model.
 3. The system for trading financial instrumentsaccording to claim 1, wherein the financial capability of the accountgroup is evaluated in real-time.
 4. The system for trading financialinstruments according to claim 1, wherein a partially executed order isallocated to the sub-accounts in real-time.
 5. The system for tradingfinancial instruments according to claim 4, wherein upon the executionof the order being completed, the order is reallocated to thesub-accounts using the selected allocation model.
 6. The system fortrading financial instruments according to claim 1, wherein the firstand second allocation models are selected from the group consisting of:equal quantity weighted, net liquidation weighted, available equityweighted, percentage of order, ratio of order, and percentage ofexisting position.
 7. The system for trading financial instrumentsaccording to claim 1, wherein the computer server is further configuredto permit the user to modify the order if the order cannot be allocatedusing the primary or secondary allocation model.
 8. A machine-readablemedium having stored thereon instructions that, when executed by acomputer at a computer server connectable to a client terminal, controlthe computer server to perform a method comprising the steps of:defining an account group, the account group including a plurality ofsub-accounts, selecting a primary allocation model for the account groupfrom a plurality of allocation models, selecting at least one secondaryallocation model for the account group from the plurality of allocationmodels, prior to executing an order, evaluating the financial capabilityof the account group to execute the order, when the evaluation showsthat the primary allocation model may be used, executing the order offinancial instruments for the account group, and allocating the order tothe sub-accounts using the primary allocation model after the order hasbeen executed, when the evaluation shows that the primary allocationmodel may not be used, but the secondary allocation model may be used,executing the order of financial instruments for the account group, andallocating the order to the sub-accounts using the secondary allocationmodel after the order has been executed, and when the evaluation showsthe first and secondary allocation models may not be used, executing theorder of financial instruments for the account group, and allocating theorder to the sub-accounts in accordance with the user's instructionafter the order has been executed, wherein the allocation model definesan amount of the order to be allocated to each sub-account.
 9. Themachine-readable medium according to claim 8, wherein the individualfinancial capability of each sub-account in the account group isevaluated using the selected allocation model.
 10. The systemmachine-readable medium according to claim 8, wherein the financialcapability of the account group is evaluated in real-time.
 11. Thesystem machine-readable medium according to claim 8, wherein a partiallyexecuted order is allocated to the sub-accounts in real-time.
 12. Themachine-readable medium according to claim 11, wherein upon theexecution of the order being completed, the order is reallocated to thesub-accounts using the selected allocation model.
 13. Themachine-readable medium according to claim 8, wherein the first andsecond allocation models are selected from the group consisting of:equal quantity weighted, net liquidation weighted, available equityweighted, percentage of order, ratio of order, and percentage ofexisting position.
 14. The machine-readable medium according to claim 8,wherein the computer server is further configured to permit the user tomodify the order if the order cannot be allocated using the primary orsecondary allocation model.
 15. A computer-implemented method fortrading financial instruments from a master account having a pluralityof sub-accounts, comprising the steps of: defining an account group, theaccount group including the plurality of sub-accounts, selecting aprimary allocation model for the account group from a plurality ofallocation models, selecting at least one secondary allocation model forthe account group from the plurality of allocation models, prior toexecuting an order, evaluating, by a computer server, the financialcapability of the account group to execute the order, when theevaluation shows that the primary allocation model may be used,executing by the computer server the order of financial instruments forthe account group, and allocate the order to the sub-accounts using theprimary allocation model after the order has been executed, when theevaluation shows that the primary allocation model may not be used, butthe secondary allocation model may be used, executing by the computerserver the order of financial instruments for the account group, andallocate the order to the sub-accounts using the secondary allocationmodel after the order has been executed, and when the evaluation showsthe first and secondary allocation models may not be used, executing bythe computer server the order of financial instruments for the accountgroup, and allocate the order to the sub-accounts in accordance with theuser's instruction after the order has been executed, wherein theallocation model defines an amount of the order to be allocated to eachsub-account.
 16. The computer-implemented method according to claim 15,wherein the individual financial capability of each sub-account in theaccount group is evaluated using the selected allocation model.
 17. Thecomputer-implemented method according to claim 15, wherein the financialcapability of the account group is evaluated in real-time.
 18. Thecomputer-implemented method according to claim 15, wherein a partiallyexecuted order is allocated to the sub-accounts in real-time.
 19. Thecomputer-implemented method according to claim 18, wherein upon theexecution of the order being completed, the order is reallocated to thesub-accounts using the selected allocation model.
 20. Thecomputer-implemented method according to claim 15, wherein the first andsecond allocation models are selected from the group consisting of:equal quantity weighted, net liquidation weighted, available equityweighted, percentage of order, ratio of order, and percentage ofexisting position.
 21. The machine-readable medium according to claim15, wherein the computer server is further configured to permit the userto modify the order if the order cannot be allocated using the primaryor secondary allocation model.